[floadaVonfoli]

is fiat money an acceptable form of money within the scope of the shariah?

does the shariah recognise and accept a currency that has no real value behind it except for the value that is attributed to it by the issuing government?

is there a shari definition of money/currency?

is it acceptable within the scope of the shariah that the value of fiat money fluctuates?.........eg is it ok that the money that you saved and earned from work last year does not have the same value from the time that you earned it, and later still over the months and years the value of that money will continue to change and fall.

[xanaxist]

I don't know the answers to those questions (I think I read somewhere that, in principle, fiat money is ok. Not sure though).

However, the thing to keep in mind is that in the real world there is no such thing as fiat money that is issued by the government. All (most?) currencies are actually bank notes (for example, if you look at US currency, it does not say, "US Treasury note" or "US Govt Note". Instead, it says, "Federal Reserve Note" (the Fed is an amalgamation of private banks).

That is, (very basically speaking) they are loans by the banks to the government, and interest is owed on those notes. Also consider the fact that banks and governments collude to such an extent that they are essentially one and the same...I don't know what that means for the shariah status of such currencies.

I hate banks with a passion. May Allah destroy them all.

[floadaVonfoli]

I don't know the answers to those questions (I think I read somewhere that, in principle, fiat money is ok. Not sure though).

However, the thing to keep in mind is that in the real world there is no such thing as fiat money that is issued by the government. All (most?) currencies are actually bank notes (for example, if you look at US currency, it does not say, "US Treasury note" or "US Govt Note". Instead, it says, "Federal Reserve Note" (the Fed is an amalgamation of private banks).

That is, (very basically speaking) they are loans by the banks to the government, and interest is owed on those notes. Also consider the fact that banks and governments collude to such an extent that they are essentially one and the same...I don't know what that means for the shariah status of such currencies.

I hate banks with a passion. May Allah destroy them all.

for your reply.

it seems that the present system of fiat money survives on interest and would not work without interest.
so in the strict sense, as soon as a person starts using money he is dealing in interest?

also, why does the government need the banks to issue this money? why do they not issue this money themselves?

[floadaVonfoli]

bump!

[Caursedus]

[QUOTE=xs11ax;680409]

for your reply.

it seems that the present system of fiat money survives on interest and would not work without interest.
so in the strict sense, as soon as a person starts using money he is dealing in interest?

also, why does the government need the banks to issue this money? why do they not issue this money themselves?[/QUOTE]



abe lincoln tried doing that and did for a while....but he was assassinated for it

kennedy wanted to do this......and was assassinated for it

as the father of rothschilds said "give me control of a nations money and i care not who makes the laws".

you now can add the dots together and work out yourself the answer to your question

[floadaVonfoli]

abe lincoln tried doing that and did for a while....but he was assassinated for it

kennedy wanted to do this......and was assassinated for it

as the father of rothschilds said "give me control of a nations money and i care not who makes the laws".

you now can add the dots together and work out yourself the answer to your question

from what i have read on the net, fiat currency took over in 1971. both abe and jfk were dead long before 1971. maybe the currency was still gold based in their days but was being controlled by a body other than the government.

what i am talking about is money that has no real value except the value that has been assigned to it by law. money that has nothing to back it up. no gold, no silver, no whatever. this is the money that we use today.

from the little that i know, a fiat currency cannot survive without usury. the very basis of a fiat currency is interest.

[fubyFrery]

abe lincoln tried doing that and did for a while....but he was assassinated for it

kennedy wanted to do this......and was assassinated for it

as the father of rothschilds said "give me control of a nations money and i care not who makes the laws".

you now can add the dots together and work out yourself the answer to your question

It definetly looks like you've been reading brother pawlak's post's and threads

[xanaxist]

I'm not sure if I believe in Lincoln and JFK being assassinated for that reason, but I suppose it's possible. Lincoln did refuse to pay the bank's ridiculous interest rates when he needed funding for the Civil War.

I have no idea why the government doesn't issue its own money. But the following might be helpful in understanding:

Yet another thing to understand is that there is far more "money" in the economy than there are currency notes floating around. I'm sure you know about fractional reserve banking. I don't know what the current reserve requirement is in the US, but I'd be willing to bet its close to 0%. But for the sake of explanation, let's assume the requirement is 10% (I'm sure it's actually far less). That means if you deposit $1000 in the bank, the bank can then go and loan out $10,000 against your deposit, while charging exorbitant interest rates.

This is obviously unethical...the bank is making money off of assets it doesn't have (that's on top of the fact of riba being unethical to begin with). I doubt the Federal Reserve even has 1% in reserve, which would explain why they so vehemently refuse to allow auditing of their books. The banks and government regularly screw around with the reserve rate and other economic tools, and in the process, the wreak havoc on people's lives. People see their assets depreciate, their jobs disappear, etc. But the banks and the government always benefit.

So the "money" supply isn't even pieces of paper with some value determined by the government, it's a bunch of 0s and 1s on a computer drive. When the government needs money, they go to the bank and tell them how much is needed. The bank will transfer the "money" (the digits on a computer screen) into the relevant accounts. In exchange, they get some promise of repayment at a given rate of interest (for example, Treasury bills/ government bonds).

It's all just one big scam. Heard of the revolving door in Washington? It's basically the phenomenon of bankers and heads of corporations going to work for the government for a few years. While working for the government, they enact legislation and policies that benefit their banks or corporations. Then after a few years, they go back to work for those very same institutions, in which they doubtless own shares. So it's like a revolving door between gov't and banks/corporations. It's all the same people getting rich off these scams.

This video might be informative, it came up on a quick Google search:
http://www.youtube.com/watch?v=Dc3sK...eature=related

[floadaVonfoli]

I'm not sure if I believe in Lincoln and JFK being assassinated for that reason, but I suppose it's possible. Lincoln did refuse to pay the bank's ridiculous interest rates when he needed funding for the Civil War.

but they still had money which was backed up with gold and silver in those days right?

I have no idea why the government doesn't issue its own money.

i dont know much about fiat currency but i am beginning to think that its because the governments are controlled by or serve the elite bankers and corporations. in other words the governments are just a front for the elite to hide behind and conduct their business of interest.

I doubt the Federal Reserve even has 1% in reserve, which would explain why they so vehemently refuse to allow auditing of their books.

is that even legal seeing as they are a private company and must be accountable to the law of the land?

The banks and government regularly screw around with the reserve rate and other economic tools, and in the process, the wreak havoc on people's lives. People see their assets depreciate, their jobs disappear, etc. But the banks and the government always benefit.

this is clear oppression and tyrany.

So the "money" supply isn't even pieces of paper with some value determined by the government, it's a bunch of 0s and 1s on a computer drive. When the government needs money, they go to the bank and tell them how much is needed. The bank will transfer the "money" (the digits on a computer screen) into the relevant accounts. In exchange, they get some promise of repayment at a given rate of interest (for example, Treasury bills/ government bonds).

why would the elite bank and the fed care about receiving money in the form of interest when they literally have a licence to print money whenever they want? maybe it is not about money at all but about control.

It's all just one big scam. Heard of the revolving door in Washington? It's basically the phenomenon of bankers and heads of corporations going to work for the government for a few years. While working for the government, they enact legislation and policies that benefit their banks or corporations. Then after a few years, they go back to work for those very same institutions, in which they doubtless own shares. So it's like a revolving door between gov't and banks/corporations. It's all the same people getting rich off these scams.

and when a small business owner dodges a little bit of tax or a labourer does a bit of fraud by declaring lower wages the whole strength of the law comes crashing down on him whereas the government/bankers/corporations are getting away with murder!

[xanaxist]

but they still had money which was backed up with gold and silver in those days right?

I'm not sure.

i dont know much about fiat currency but i am beginning to think that its because the governments are controlled by or serve the elite bankers and corporations. in other words the governments are just a front for the elite to hide behind and conduct their business of interest.

exactly.

is that even legal seeing as they are a private company and must be accountable to the law of the land?

Who knows? Legal, illegal, doesn't matter when you are above the law.

this is clear oppression and tyrany.

yep.

why would the elite bank and the fed care about receiving money in the form of interest when they literally have a licence to print money whenever they want? maybe it is not about money at all but about control.

So they can continue the charade. Where do you think the government gets the money to pay that interest? They borrow it....by selling more government bonds. It's an endless cycle. As long as banks are given the ability to create money, they have power over everyone else. The problem is, they've wrapped up the financial system in such obscure processes and "tools", and couched it in such confusing jargon, that most people can't see through the bullsh*t or won't even try.

The point is, anybody who understands how ludicrous the system is, is either in on the scam, too stupid to understand or care, or knows what's happening, but powerless to do anything about it.

To go back to your original point, I don't see why a fiat currency issued by a government with a fixed value, even if backed by nothing, would not be acceptable in shariah. There could be reasons I don't know. Of course, the sunnah is gold and silver. The benefits of using precious metals are:

they have intrinsic value because they are: accepted by all people in all times, and have practical applications.

they are malleable.

do not rust.

cannot be counterfeited.

they are pure elements, meaning all samples of the pure element are exactly the same, all the way down to the atomic level. this is a good argument against people who say gold standard is unrealistic because there isn't enough gold to go around. so what if the amount of gold is limited? just let the value of gold appreciate. if a government chooses to issue currency fully backed by the amount of gold in the treasury, it can issue notes for gold down to increments of atoms, if necessary (and that's an extreme case).

But yes, today's fiat currencies are all plagued by riba. This I believe is the fulfillment of the hadith in which the Prophet mentions that a time would come when no one would be able to escape being touched by riba.

[floadaVonfoli]

the answer for this...

To go back to your original point, I don't see why a fiat currency issued by a government with a fixed value, even if backed by nothing, would not be acceptable in shariah. There could be reasons I don't know.

could be this...?

But yes, today's fiat currencies are all plagued by riba. This I believe is the fulfillment of the hadith in which the Prophet mentions that a time would come when no one would be able to escape being touched by riba.

the whole basis of the fiat currency is riba. without riba there would be no fiat currency. but not only that, but the whole system is tyrannical and oppressive. it is a zulm upon the people.

[egoldhyip]

Asalam WR WB

From my understanding upon the matter.. fiat currency was never allowed by the Shariah. Just recently, near the decline of the caliphate, fatwas were passed by 'scholars' (under Western guidance ) which authorized its use and permissibility, although it had been deemed haram for all of Islamic history. There is a lot of good work on the finance money system by the Murabitun group. I've found from their readings, they grasp the reality of the situtation, whereas many others dont.

One must know the diff types of money: commodity, representative and fiat. Commodity is gold, silver, seashells, dates, etc. Representative was utilized by the Muslm Caliphate at various times and basically represents the commodity itself (this is a fixed definitive relationship 1:1, etc.). The fiat was initially introduced as a rep, then pseudo-representative (eventually the rate of conversion was arbitrarily established) and eventually it was weaned off this system in 1971.

The position of scholars today is we have no option but to use fiat so as a maslaha and allowance for the people it is continued to operate and spread its harm.

Unfortunately, mnany (including scholars) don't understand the complexities of the modern banking/finance system as this is not found in the traditional sources/curriculums of most madrasas/islamic schools. They come out viewing the world thru the lens of theory and applying principles and theorems to axioms wher tehy are not relevant and creates a further mess, as is the case with the whole modern banking system, whether it be Islamic or conventional. The foundation of both is money created out of thin air as debt that doesn't exist. Whether you put a beard and a jilbab on it or leave it as is, is irrelevant as the damage is already done. The whole downfall of the Muslim world and supremacy of the West is based on the ability of one group to have an unlimited supply of money and acquire resources (physical, intellectual, etc) for free, whereas every other entity or group (outside of their select system) has to trade hard physical assets to acquire those same goods/systems.

Allah knows best and may He guide us all to what is pleasing to Him.

[floadaVonfoli]

maybe moulana abu hajira and moulana taliban could give us their understanding of this. colonel hardstone too but he doesnt seem to be dropping by much these days.

[Kneefrenolf]

I think we have discussed this issue before when I was talking with our old br. celt. islam, laughinglion etc.. about the fiat money and the shar'i concept of thaman urfi.

essentially can one of your post in bullet form why should the current currency not be counted as viable shar'i means of transaction. That will save me some time.

[floadaVonfoli]

I think we have discussed this issue before when I was talking with our old br. celt. islam, laughinglion etc.. about the fiat money and the shar'i concept of thaman urfi.

essentially can one of your post in bullet form why should the current currency not be counted as viable shar'i means of transaction. That will save me some time.

i am not too sure myself and made this thread so i can explore details with the other members. i dont even understand fiat currency in detail, i just have a loose idea of it. ( i dont think we are meant to be able to understand it in detail!)

from what i know the whole system is based on riba. without riba the system of fiat currency cannot survive. the 'money' is created by giving out loans (which do not actually exist and are just an idea or a promise) and then interest is paid on these (non-existant) loans.....and this somehow created money (lolwut!)???

[reawnvam]

i am not too sure myself and made this thread so i can explore details with the other members. i dont even understand fiat currency in detail, i just have a loose idea of it. ( i dont think we are meant to be able to understand it in detail!)

from what i know the whole system is based on riba. without riba the system of fiat currency cannot survive. the 'money' is created by giving out loans (which do not actually exist and are just an idea or a promise) and then interest is paid on these (non-existant) loans.....and this somehow created money (lolwut!)???

salam alikum,
now I got what is said about fiat money cann ot survive without interests. But what is difference between interest based on REAL economic growth (means interests based on growth of businesses which in macroeconomic view represents growth of society) and interest above it - the riba or ususry? I think system which is in west now is usury for several reason, not only as the intrests are result of speculations from which only little people have benefit and they use money of other people but also for reason that no one is discouraged to take loan. Only one who is protected in western society is Creditor.

[floadaVonfoli]

fatwas were passed by 'scholars' (under Western guidance ) which authorized its use and permissibility, although it had been deemed haram for all of Islamic history.

do you have the fatwas or any references to the fatwas for the parts highlighted in red?

[Kneefrenolf]

do you have the fatwas or any references to the fatwas for the parts highlighted in red?

the older ulama could not have issued fatwa on the current fiat money since before 1938 all notes were backed by gold and were not currency in themselves rather receipt of debts. Then up untill 70's the money was partially backed by gold reserves.

These are nicely mentioned in Mufti Taqi's risalah about "Note ki Shar'ee Haythiyat"

[floadaVonfoli]

the older ulama could not have issued fatwa on the current fiat money since before 1938 all notes were backed by gold and were not currency in themselves rather receipt of debts. Then up untill 70's the money was partially backed by gold reserves.

These are nicely mentioned in Mufti Taqi's risalah about "Note ki Shar'ee Haythiyat"

how about the current system where money is not backed by anything and created out of interest? what is the islamic stance on that?

[xanaxist]

I think we have discussed this issue before when I was talking with our old br. celt. islam, laughinglion etc.. about the fiat money and the shar'i concept of thaman urfi.

essentially can one of your post in bullet form why should the current currency not be counted as viable shar'i means of transaction. That will save me some time.

Assume no interest is involved (that is, the currency is just issued by the government and given a fixed value in relation to a commodity such as gold), but that it does not represent any real assets owned by the government. Also assume that everyone agrees to use this fiat currency as a medium of exchange.

Some possible objections are:

1. Whoever issues the currency could potentially issue the currency in an amount exceeding the total amount of gold in existence. Because the issuer doesn't bother to back up the currency with actual gold, there is no way of knowing if and when that happens. If it does happen, it's the equivalent of fraud, whether intentional or unintentional.

2. The assignment of a value in grams of gold to the currency is completely arbitrary.

3. Too much power in the hands of the issuer of currency. The value of a medium of exchange should be dictated by the market only. For example, according to simple supply and demand, if the abundance of commodity x increases in relation to commodity y, if you were to trade with someone, you would need to give them more x's for the same amount of y's. On the other hand, if someone can simply create money (let's say commodity y is our fiat currency), then the value of x in terms of y becomes artificially increased. Whoever controls the currency can wreak havoc on the markets. For those who own the means of production, that doesn't really matter. However, for a worker receiving a fixed wage, it means that his wages have decreased while prices have increased. It's oppression.

I can't think of anything else. Basically, the real issue is in the creation of imaginary assets. Isn't that wrong? Even if we assume that the little scraps of paper are what hold value, it becomes un-useable as currency because paper is abundant, so it has no intrinsic value. And the cost of printing money is negligible. Those who have the equipment can create wealth from nothing and cheat others. Even if no interest is involved, it's still fraud.